K&F Acquisition shifts $50 million to bank loan from bond offering, $315 million 10-year notes talked 7¾%-8%

By Paul A. Harris

St. Louis, Nov. 4 - K&F Acquisition Inc. shifted $50 million to its term loan from its pending high-yield bond deal on Thursday, according to a syndicate source.

The downsized $315 million 10-year senior subordinated notes (Caa1) are being talked to yield 7¾% to 8%, with pricing expected to take place on Friday. The notes are non-callable for five years.

Lehman Brothers and Goldman Sachs are joint bookrunners for the Rule 144A/Regulation S offering. Citigroup and JP Morgan are co-managers

Proceeds will be used to fund the acquisition of K&F by Aurora Capital Group from Bernard Schwartz and Lehman Brothers Merchant Banking for $1.06 billion in cash. The transaction includes the tender for K&F's $185 million 9¼% senior subordinated notes due 2007 and $250 million 9 5/8% senior subordinated notes due 2010.

The company is a New York City-based manufacturer of aircraft parts.

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